MVNO Business Models and New Entrant Strategies
2005.10.10   |   30 pages   |   MVNOs & Distribution Strategies

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In this report we examine the issues involved in starting up and operating a successful MVNO business including aspects such as branding, market segmentation, pricing, margins and distribution. We examine the different market entry strategies adopted by MVNO players and provide an in-depth analysis of Virgin Mobile's positioning and the reasons behind its success in the UK market.

We believe the days of 'discount driven' MVNOs are numbered. Future MVNO success stories will be based on 'value added' positioning. In some cases this may be achieved on the back of a strong brand and very effective marketing as in the case of Virgin Mobile. However we also expect to see future MVNO successes emerge from specialist MVNOs targeting the needs of substantial and well-defined groups. Examples include MVNOs addressing charity, ethnic/immigrant, and international traveller groups. Detailed examples are presented in the current report.

Keywords: pricing, movida, starting, minorities, entrant, new, immigrant, groups, brand, up, call4care, specific, start, ethnic, models, distribution, effective, transatel, mvno, virgin, virtual, business, margins, segments,

1 Overview 1
1.1 MVNO Definition 1
1.2 MVNO Categories 1
2 MVNO Business Models 3
2.1 Critical Success Factors 5
2.2 Financial Implications 6
2.2.1 Set-up Costs 6
2.2.2 Operational Expenses & Revenue Margins 6
3 New Market Entrant Strategies 9
3.1 Discount Providers 9
3.1.1 Telmore's Model 10
3.2 Niche and Value-Added Providers 12
3.2.1 call4care Targeting the Charity Segment 13
3.2.2 Movida Focus on Ethnic Communities 13
3.2.3 Transatel Offering Multi-Country Services 15
4 Virgin Mobile Performance in the UK Market 17
4.1 Background 17
4.2 Supply Agreement with T-Mobile 17
4.3 Basic Service Offer & Key Target Segment 18
4.4 Competitors' Offers 19
4.5 Move to Target Contract Segment 21
4.6 Value Added Service Propositions 23
4.7 Market Impact 25
4.8 Key Factors Behind Virgin's Success 27
4.8.1 Examples of Marketing Initiatives 29

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